Managing Your Debt

Financial Boot Camp for 20-Somethings: Day 4 of 5

It’s time to get your money in order.

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Many of us make one of the most consequential financial decisions of our lives before we even hit the legal drinking age: borrowing money for college.

The college acceptance letter is followed by the financial aid package (“aid,” lol), which is really just a nicer way of stating how much debt you’ll need to amass to pay for your degree.

It’s at that moment that Americans — teenagers! — have their first encounter with the debt culture that’s ingrained in how we pay for just about everything. It’s always there, for the taking, to buy cars, homes, Lululemon leggings and more. U.S. households carry more than $17 trillion, for all of it, including credit cards.

So while we’ve normalized indebtedness in this country, we’ve also moralized it: If you have debt that you can’t afford to pay back, you must have done something very wrong.

Yet we know that’s often the furthest thing from the truth. Many people accumulate debt, not because of lattes, nice sweaters and exotic vacations, but because of circumstances beyond their control, from health issues to job loss.

Then there are the structural reasons that most people borrow, like wages not keeping pace with education costs and a societal decision to push more of the burden onto individuals. We should all be asking big, basic questions about how we landed here — where college degrees often feel like luxury products and medical debts often drive bankruptcies — and what it would take to change the status quo.